Elavon, Inc. v. Northeast Advance Technologies Inc.

Background

Joel and Rivky Friedman moved to continue the deposition of Elavon, Inc.’s designated witness under Federal Rule of Civil Procedure 30(b)(6). That rule allows a corporation to designate a representative to testify on the corporation’s behalf about topics identified in a deposition notice. The Friedman Defendants had served an amended notice covering topics including credit-card rules, chargebacks, Elavon’s relationship with Northeast Advance Technologies, merchant activity, risk management, communication systems, and record-retention policies.

Elavon presented Holly Franklin as its Rule 30(b)(6) witness. Her deposition on October 20, 2021, lasted approximately eight hours. Franklin testified that she had spent about one hour preparing. The Friedman Defendants argued that she was unprepared and could not adequately address the noticed topics. They identified alleged deficiencies involving the rules governing credit-card use, certain chargeback activities, Northeast’s charging activity and Elavon’s investigation, allegations and discovery responses, and record-retention policies.

Legal Standard

A corporation must make a Rule 30(b)(6) witness available who can provide complete, knowledgeable, and binding answers on the corporation’s behalf. The corporation’s duty to prepare the witness applies when the witness lacks personal knowledge of matters in the deposition notice. Rule 37 permits sanctions for failure to comply, but sanctions are generally appropriate only when the testimony’s deficiencies are serious rather than limited to a lack of desired detail. Courts are also reluctant to impose sanctions when the parties have not made a good-faith effort to resolve the alleged deficiencies or when the request appears tactically motivated.

Court’s Analysis

The court rejected the Friedman Defendants’ reliance on Franklin’s one hour of preparation. Franklin had personal knowledge of the case, had worked at Elavon for 23 years, had held her position for approximately two years when she detected the chargeback issues, and described her career as focused on loss prevention and risk assessment. Given that knowledge and experience, the court found that one hour was sufficient preparation for her role as Elavon’s Rule 30(b)(6) witness.

After reviewing Franklin’s testimony, the court found that her testimony was not insufficient on any of the topics identified by the Friedman Defendants. The court stated that the requested information generally fell within the deposition notice but that the Friedman Defendants were demanding an unrealistic level of detailed recollection without a more specific notice. The court characterized the motion as meritless and tactically motivated.

Disposition

The court denied the Friedman Defendants’ motion to continue the deposition and directed the clerk to terminate the motion at Docket 494. The opinion also states that any request for sanctions based on spoliation would be addressed in a separate order. It further states that the argument that Franklin’s deposition had been improperly terminated was without merit.